(f) LETTERS OF CREDIT. At Lessee's option and with Lessor's
 agreement Lessee may provide at the Delivery Date and
 annually thereafter during the Lease Term, letters of
 credit issued by a bank acceptable to Lessor, in lieu of
 Supplemental Rent, in respect of Aircraft utilization in
 Flight Hours, Cycles or calendar months as appropriate
 to each maintenance event type. Each letter of credit
 shall have validity of 6 months or until issue of a
 replacement letter of credit (whichever occurs later).
 Payment of the redelivery maintenance adjustments at the
 Redelivery Date by Lessee to Lessor pursuant to Clause
 12.5 will terminate Lessor's requirement for such
 letters of credit. In addition, each letter of credit
 shall be issued in a form and from a bank acceptable to
 Lessor. The first letter of credit issued at the
 Delivery Date shall be for the amount of Supplemental
 Rent that would accrue for the first 3 months of
 operation with an assumed utilization of 250 Flight
 Hours and 83 Cycles per month and the amount of
 Supplemental Rent that would have accrued on the last
 day of the month prior to the Delivery Date.
 Semi-annually thereafter, the letter of credit shall be
 the amount of Supplemental Rent that would have accrued
 on the last day of the month prior to issue plus that
 which would accrue for the following 3 months of
 operation with an assumed utilization of 250 Flight
 Hours and 83 Cycles per month less any Supplemental Rent
 reimbursement that would have occurred in respect of the
 maintenance events outlined herein to reduce the
 Supplemental Rent balance in respect

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 of that maintenance event by the lesser of (a) the
 relevant Supplemental Rent balance and (b) the valid
 invoice in respect of that maintenance event.

 5.5 PAYMENTS: